Is your credit score not looking too great at the moment? From getting loan rejections to rejected credit card increases - the plethora of disadvantages associated with a bad credit score can often be difficult to deal with. To see how we can improve credit score, let’s first take a look at the main factors that affect your credit score.
Factors That Make Up Your Credit Score
Credit Scores are made up of 3 main factors:
- Patterns in Your Credit History: These can include your number of credit accounts and cards, your repayment history and number of credit applications. Other aspects of negative credit history such as bankruptcies, defaults, credit infringements and court judgements can also have an impact on your credit score.
- Characteristics of Your Credit Profile: Personal characteristics such as age, length of time at current job and home; can also impact your credit score.
- Features of your Credit Applications: Features of your previous and current credit applications such as type of credit and amount of credit; can also affect your credit score.
Now that we understand the factors that make up and effect credit score; let’s take a look at how we can improve it.
1. Paying Off Debt
It may seem simple but paying off debt can appear like a very hard and unattainable task for some individuals. First, start off by tacking your current bills by paying them regularly and on time. You may want to think about automating your credit card payments to make sure they are paid off. Secondly, make a list of your current debts and create feasible plan to pay it off incrementally. If you are struggling to pay off your debt or want a personalized plan to pay off debt, contact our debt professionals at Debt Fix. It may also be a good idea to look into debt consolidation options to make paying off debt easier.
2. Avoid Making a Lot of Hard Credit Enquires
Hard credit enquires refer to enquires made by potential credit providers when you apply for any form of credit. Every time a credit provider makes an enquiry into your credit report, a few points are taken off your credit rating. Lenders may also view too many hard credit enquiries in a negative light as it may seem like you are in desperate need of credit; and thus are not managing your finances well. This is why you should only request soft enquiries (i.e. request to see your own credit report) until you are ready to apply to a credit provider with full confidence of approval.
If you are looking to get a loan approval but have a bad credit score, you may want to think of debt consolidation options to consolidate all your loans together. On the other hand, if you are thinking of applying for a personal, home or car loan it may be a good idea to speak to a debt professional to make it a fast and easy process. If you need in improving your credit score or need debt-help in general, please don't hesitate to contact our specialists on 1300 332 834 or leave an inquiry for a no-obligation free debt assessment today.